Protectionist rhetoric in the West is a worry, says Vishal Sikka

He, however, argued that Infosys has the capability to surmount hurdles in the way of the free movement of technology professionals.Jochelle Mendonca&TV Mahalingam | ET Bureau | Updated: November 16, 2016, 09:05 IST

Protectionist rhetoric emanating from developed countries has potentially serious implications for the software industry, Infosys Chief Executive Officer Vishal Sikka said, but he argued that the company has the capability to surmount hurdles in the way of the free movement of technology professionals.

Sikka, a former technology chief at SAP, made a case for realism, arguing that Infosys must contend with the consequences of protectionist impulses in Western nations, particularly the US and the UK which contribute the lion’s share of the revenue for Indian IT companies.

“The statements they have made are obviously very serious about the nature of our business,” Sikka, 49, said in an interview, referring to campaign-trail rhetoric from US president-elect Donald Trump about overhauling visa rules to protect American jobs.

“We have to be prepared to deliver value under these circumstances. It is within us to do that; we can do that.” Trump’s election on November 9 has sent shivers through the Indian IT sector.

The Indian IT sector is spooked about more restrictions on the H-1B visa programme that the industry depends on. In Britain, which has voted to leave the European Union, the minimum salary that a professional has to be paid on a work visa has been raised by around 50%, although the impact of this move is expected to be limited.

Sikka, the first non-founder CEO of Infosys, has been guiding the company through a difficult phase for the software services industry, which is grappling with the changes brought on by automation, a difficult global economic environment and changing business models.

Sikka enjoyed the golden touch during the first year and a half on the job, outpacing industry, but the Bengaluru-based company has had to revise its revenue guidance lower twice this year. But Infosys has not been alone in facing headwinds, as rivals Tata Consultancy Services, Wipro and Cognizant are also travelling in the same direction.

Sikka was keen to emphasise the state of the company when he took over in August 2014 from founder NR Narayana Murthy. He accepted that the turnaround had not been as fast as it could have been, but attributed part of that to the state of the company at that time.

“My overarching sense at that time was to stabilise things, to calm things down, to inspire, etc. The net result of that is that the transformational effort has been slower than what I wanted to see,” he said.

Infosys experienced a tough two years before Sikka took over — attrition was over 20%, it was losing top and middle-level management and it was struggling to find revenue growth momentum. After having lost the IT bellwether crown to TCS over three years ago, Infosys has just begun growing faster than its larger rival.

Bansal payout

Sikka also addressed concerns about the resignation of former chief financial officer Rajiv Bansal last year and his severance package. Infosys had handed Bansal Rs 17 crore in severance, a sum it justified due to the presence of an ‘enhanced non-compete’.

The company has had to battle perceptions that the payout was meant to silence Bansal, now the finance head at taxi aggregator Ola. Last month, it announced that it had conducted two independent investigations into the payments that had cleared it of wrongdoing.

“We worked on a severance package for him and that was something that we all felt was fair at the time. In retrospect, you can argue that it was larger than it should have been. It was a judgement that we made at the time, it was done over a two-day period that was intense,” Sikka said. He added that he was comforted by the fact that no one in the company had done anything wrong.